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O'Brien: The tablet phenomenon turns Silicon Valley upside down

The iPad mini, at left, is shown next to the 4th generation iPad in San Jose, Calif., Tuesday, Oct. 23, 2012. The device has a screen that's about two-thirds the size of the full-size model, and Apple says it will cost $329 and up. (AP Photo/Marcio Jose Sanchez)

Apple (AAPL) gave us the iPad Mini. Microsoft gave us Surface. On Monday, Google (GOOG) is expected to give us a new Nexus tablet. The timing of all these announcements, all within a week of each other, might be coincidence, or they might be some not-so-subtle gamesmanship between rivals.

But taken together, they are proof the tablet has become the most important platform in computing. Since the first iPad was introduced more than two years ago, tablets have completely turned the computing industry upside down.

In fact, at this point it is impossible to overstate the impact of tablets. The sales continue to blow past even the most optimistic projections. And over the next couple of years, they are projected to account for almost all the growth in the sales of personal computing gadgets.

"It's just an astonishing trend we've seen over the past year," said Kevin Tillman, a senior research analyst for the Consumer Electronics Association.

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I heard Tillman and some of his CEA colleagues speak last week at a research forum the association held in San Francisco. While their work extends across nearly all consumer electronics gadgets, the theme of the three-day gathering was tablets, tablets and, well, tablets.

It's no secret tablets are hot, I still found the numbers they presented to be truly mind blowing:

From 31.9 million sold in 2011, annual tablet sales are projected to reach 119.9 million in 2014. By comparison, CEA expects notebook sales to increase by only 10 million by 2014, while desktop and netbook sales are expected to decline.

In a survey of U.S. adults, tablets are the most desired gadget for the holidays, with 16 percent of adults saying they want one. High-definition TVs were second, at 10 percent, followed by smartphones at 8 percent.

The number of U.S. adults who have a tablet has doubled in the past year from 14 percent to 31 percent, according to CEA.

Apple said on Tuesday it has sold more than 100 million iPads since the debut in 2010.

"What's propping up the PC market?" Tillman said during his presentation. "It's definitely tablets."

Indeed, the impact of tablets has rippled beyond computing. The No. 1 use of tablets, according to CEA, is watching videos. And that has gutted the sales of LCD televisions less than 24 inches, often the second TV in a household, have fallen at least 20 percent, year-over-year, for each of the past three years. That's an impact hardly anyone guessed on that day when Steve Jobs stepped on stage to debut the first iPad.

"It's a tremendous decline at a very fast clip," said Shawn DuBravac, CEA's chief economist, of smaller televisions.

As if to emphasize the ripple effects, while the tablet phenomenon was being discussed in San Francisco last week, at the other end of Silicon Valley the CEO of AMD was delivering the shocking news that this mighty chip company was being overwhelmed by the tablet boom.

AMD CEO Rory Read said on an analyst call that the company had posted a significant earnings miss and plans to lay off 15 percent of its staff.

"We underestimated the speed of this change in our industry and expected to have several years to transform AMD's business," Read said. "But we must implement our transformation on a more aggressive timeline."

And now, Microsoft is jumping in with both feet, launching its radically redesigned Windows 8 on Friday along with its Surface tablet. CEO Steve Ballmer has said the company is making a big bet on mobile computing, and tablets in particular.

Is there anything that can stop tablets at this point. Yes, as a matter of fact. It's ... tablets.

Because tablets are so new, it's unclear how long they last before a consumer feels it's obsolete and wants to upgrade to a newer one. Clearly, Apple is nervous about this, which is likely why they're not allowing owners of the original iPad to upgrade to the newest version of their mobile operating system, iOS6.

At their rate of growth, it's conceivable that everyone who wants a tablet might have one in the next couple of years, according to the CEA analysts. And unless tablet makers can convince large number of people to keep replacing them, then the tablet industry (aka, Apple), could be facing stagnation.

Still, while that danger lurks on the horizon, at the moment, the era of tablet computing is still in ascension. Every company in computing must figure out how to ride the tablet tidal wave or drown in its wake.

Contact Chris O'Brien at 415-298-0207 or cobrien@mercurynews.com. Follow him at https://twitter.com/obrien and read his blog posts at www.siliconbeat.com.